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New Law Allows In-Plan Rollovers to Designated Roth Accounts
Excerpt: "The Small Business Jobs Act of 2010 permits employers to amend their §401(k) or §403(b) plans to allow participants to transfer an eligible rollover distribution (ERD) into their designated Roth account in the plan if the transfer is of an ERD: 1. made after September 27, 2010; 2. from a non-designated Roth account in the same plan; 3. because of an event that triggers an ERD from the plan; and 4. otherwise meets the rollover requirements."
(U.S. Internal Revenue Service)
DOL Amicus, in Support of Plaintiffs-Appellants and Requesting Reversal in Renfro v. Unisys
Excerpt: "Argument: I. Allegations that fiduciaries imprudently selected investment choices that charged excessive fees in relation to the services provided plausibly state an ERISA claim for fiduciary breach II. ERISA section 404(c) does not provide a defense to defendants' alleged imprudent selection of investment options with excessive fees'
(U.S. Department of Labor)
DOL's Interim Final Rule Requires Detailed Fee Disclosure (PDF)
3 pages. Excerpt: "Plan fiduciaries will be able to obtain the information necessary to make informed decisions regarding services rendered to and expenses paid from the plan. That's the goal of the interim final rule relating to fee disclosure that [EBSA] issued on July 16. [Note: This article was originally written for and was published in Thompson Publishing Group's Pension Plan Fix-It Handbook and is published/reproduced with the permission of the Thompson Publishing Group.]"
'In-Plan' Roth Conversions (PDF)
3 pages. Excerpt: "The new Roth conversion feature raises a number of open issues including the scope/timing of the plan amendment, the applicable sourcing and basis allocation rules, the application of the five year holding period for tax-free treatment, reporting and withholding rules, and investment direction issues. Guidance is necessary to properly implement this provision and the timeframe for action is tight."
(Groom Law Group)
Philadelphia Can Repeal DROP, But Outcome of Court Challenge Uncertain
Excerpt: "[The Philadelphia City Solicitor]'s 13-page assessment says a sentence in the 1999 law stating that DROP 'will continue under the same terms indefinitely unless and until further amended by City Council' means Council has the right to repeal it."
(The Philadelphia Inquirer)
Defined Benefit Plan Funded Status Up for Quarter, but Down for Year
Excerpt: "Mercer said t he deficit in pension plans sponsored by S&P 1500 companies decreased by $79 billion to $428 billion at the end of September according to its figures. This deficit corresponds to a funded status of 76%, compared to a funded status of 71% at the end of August and 84% on December 31, 2009."
Public Pension Funding Levels for All 50 States
Excerpt: "Data is for states' respective fiscal year ends, current as of August 20, 2010. Percentages were calculated by dividing the fair value of plan assets by the projected benefit obligation."
Cities in Debt Turn to States, Adding Strain
Excerpt: "Harrisburg, the capital of Pennsylvania, dodged financial disaster last month by getting money from the state to make a payment to its bondholders. It did so even though the state warned that the money had to be used for city workers' pensions."
(The New York Times; free registration required)
Should Public Retirement Plans be Fully Funded?
Excerpt: "A common argument for full funding is that pensions are a form of deferred compensation that does not justify a debt. The paper examines public finance, political economy, and financial market issues that bear on optimal funding, broadly and in a series of models."
(National Bureau of Economic Research: paid subscription or individual purchase required to retrieve fulltext)
A Suggestion for a Fiduciary Standard for DC Annuity Purchases
Excerpt: "I suggest that no fiduciary standard can require a conclusive prediction of the future, and that it is probably even a misapplication of the safe harbor to read it that way. The ERISA standard is not prescience, but prudence: 'with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.'"
(Business of Benefits)
The Fiduciary Process is Only As Good As the Questions Asked
Excerpt: "A recent court case decision in California threatens to 'upset the applecart' with regard to accepted fiduciary practices. Although all but one charge was dismissed, the plaintiffs did score a win that might surprise you."
Successful Retirement May Depend on How Well You Steer Clear of Five Key Retirement Roadblocks
Excerpt: "By carefully understanding all five of these roadblocks and most importantly, how they affect you and your retirement, you can remain vigilant, and avoid succumbing to any one or combination of these forces. Some of these issues can never be completely eradicated, but by planning and implementing a goal-oriented strategy, you can start to realize a dramatic improvement."
(U.S. News & World Report)
Valued by every practitioner and recommended for every ERPA candidate, The ERISA Outline Book, 2010 Edition by Sal L. Tripodi, J.D., L.L.M. offers six volumes of vital information on everything you need to know, including over 100 new rulings, guidances and regulations affecting retirement plans.
Order yours today! Visit www.asppa.org/bookstore!
Benefits in General; Executive Compensation
Starbucks is Pleasing Employees and Pouring Profits
Excerpt: "Full health-care benefits (medical, dental, vision and alternative services) are offered to all employees, including part-timers who work at least 240 hours per calendar quarter. The EAP is available to all employees. Employees share in the company's growth via 'Bean Stock' (stock options) of up to 14 percent of their gross pay, and a stock-investment plan allows them to buy shares of Starbucks common stock at a discount . . . ."
(Workforce Management; free registration required)
Aon Hewitt and Aon Corp. Fact Sheets
Excerpt: "Aon Corporation (NYSE:AON) announced that it has completed its merger of Hewitt Associates, Inc. with a subsidiary of Aon, creating Aon Hewitt, the world's premier human capital solutions firm."
Record Number of Companies Rated in HRC's 2011 Corporate Equality Index
Excerpt: "[The Index scores] 30 specific policies and practices covering nearly every aspect of employment for LGBT workers from non-discrimination protections and the training surrounding those policies to domestic partnership and legal dependent benefits to gender transition guidelines and LGBT employee resource groups."
(The Human Rights Campaign)
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